Six Questions About Obamacare Answered
As a late 20-something, I could very possibly be a member of the "young invincibles," a label used to describe people between 18 and 34 who do not have health insurance because they think they're, well… invincible (not to mention broke).
I lucked out in that five years ago, I somehow found myself working for the largest private statewide health foundation in California, dedicated to improving the health status of underserved populations in California. The ability for communities to have solid access to health care is one of our core values. As a reflection of this value, a variety of health insurance options are provided to our employees at a very affordable rate.
As most of us know, not everyone is so lucky. Recently, at a party during a “what do you do” conversation, a freelance screenwriter (struggling to make ends meet) asked me what he could do to get health insurance being single, unemployed, and having a few health issues to tackle. He, like many of us, will be required to have health insurance pretty soon. But beyond that, we don’t know much. (Here's one Austin filmmaker's journey.) So I spent some time today leafing through healthcare.gov and other sites with any 411 to get the quick down-and-dirty of what we all need to know going into January 1, 2014, when most of us will be required to have health insurance.
1. Who needs to have health insurance?
All U.S. citizens and permanent residents are required to be in possession of health insurance by January 1, 2014. There is always an exception to the rule, but you probably aren’t that exception. In addition, your plan will need to meet the "Minimal Essential Coverage" requirement. That’s a lot of complicated scary words that just mean you can comply by either having:
- Private plans, including employer-provided insurance (including retirement plans and COBRA
- Medicaid (for low income individuals and families)
- Medicare (for people 65 and up)
- Employer-provided insurance (including retirement plans and COBRA)
- Plans bought through the Health Insurance Marketplace (for a lot of folks who don’t have access to any of the above); you’ll also hear them called ‘exchanges’, and each state will have their own
(Note: there's a difference between Marketplace health plans and private plans.)
In other words, if you're already covered through one of these plans, chances are there is no further action required on your part.
Other plans like CHIP, TRICARE, and certain other plans for veterans and Peace Corps volunteers are also valid. Additionally, young adults up to the age of 26 can remain on their parents’ plans.
For some populations, including the undocumented and foster children, things are a little different. Before the Affordable Care Act, foster children who turned 18 immediately lost healthcare when they aged out of Medicaid coverage. The Affordable Care Act will now cover them up until age 26, so long as they remain in their state of residence and were enrolled in Medicare until age 18. For the undocumented, mixed-status households (where at least one parent is undocumented, and one child is a citizen), health care will remain an uphill climb for the undocumented in the household, with limited care through Emergency Medicaid. Community health centers can continue to provide non-emergency health care regardless of immigration status (more on this in a future post in our "Countdown to Coverage" series).
Aside: Our foundation has put together this 60-second video, "Dreaming of Healthcare," to shed some light on this issue.
2. What’s it going to cost me?
Some plans offered through the exchange will have lower monthly premiums, but you'll likely pay more out of pocket when it comes time for a visit. Some will be higher premiums, and others will fall somewhere in the middle (think car insurance). For instance, if you don’t plan to have a lot of doctor’s visits, you’re probably going to want to opt for the Bronze or Silver plans. If you plan to have a lot of doctor’s visits, you might want to choose the Gold or Platinum plans. If you’re broke and under 30, you may be eligible for a catastrophic plan (again, this is analogous to catastrophic car insurance coverage). You can find out more from a refresher on the difference between premiums, deductibles, co-payments, coinsurance, out-of-pocket maximums and lifetime limits.
Tax credit subsidies—they’re like coupons to buy your exchange plan—could offset your cost. Depending on your income and family size, you may be eligible for some discounted rates on the plan you choose. You don’t even have to do anything special. You’ll find out as soon as you submit your Marketplace application (as early as October 1). Essentially, the lower your income, the more you will save. According to a report released by Health and Human Services, for a single person in California whose income is $17,325, this person’s plan could cost as low as $34 a month. A 25-year-old who purchases a silver plan without tax credit will cost $174 a month. A catastrophic plan (for those eligible) can be purchased for $117 per month. You can estimate if you qualify for subsidies using this nifty calculator from The Kaiser Family Foundation. You can also read more here about the nitty gritty of the behind the scenes of the Premium Tax Credit.
3. When will I be required to have insurance?
Beginning January 1, 2014, you and any family members will be required to have coverage. You can begin enrolling in your state’s exchange beginning Tuesday, October 1, 2013. You have until March 31, 2014 to complete open enrollment in an exchange. After March 31, you won’t be able to get coverage through the marketplace until the next annual enrollment period unless you have a qualifying life event (like moving states, marriage, divorce or pregnancy). You can get a personalized checklist that will get you ready to apply and can sign up for text or email updates.
4. What happens if I don’t buy insurance?
If you don’t buy insurance, you will be assessed a fine when you file taxes. Beginning in 2014, anyone who chooses to go without some form of available coverage will be fined $95 a year or 1% of yearly income, whichever is higher. The fee for uninsured children will be $47.50 per child, up to but not exceeding $285. By 2016, this fine for individuals will jump to $695, or 2.5% of yearly income, whichever of the two is greater. There are some folks who will not be fined. If you’ve only been uninsured for less than three months out of the year, if your income is determined to be too low and coverage is considered to be unaffordable, or if you live in a state that has not opted for Medicaid expansion, you will not have to pay this fine. You may also file for a hardship exemption on your 2014 tax return. More information will be available on October 1, 2013 with your state’s exchange.
5. Why is this happening (and will it really make a difference)?
The average cost of a three-day hospital stay is $30,000. Fixing a broken leg costs $7,500. Essentially, the government stepped in to protect consumers from debt and bankruptcy due to unmanageable health insurance costs. You’ll get a lot of free preventive care (a wide range of health services, including HIV screenings, flu shots, herpes screenings, diet counseling for high risk folks, mammograms, well-woman visits, contraception and depression screenings). It holds insurance companies accountable for rate increases, and if they don’t abide, you may get a rebate in the mail. If you made a honest mistake on your application, your insurance company is now prohibited from arbitrarily canceling your coverage.
It’s estimated that 19 million young adults between 18 and 34 don’t have health coverage, largely due to cost. Under Obamacare, a whopping 17 million of 19 million uninsured young people are likely eligible for subsidies or Medicaid under Obamacare. Note: Know that if you’ve been covered with health insurance since March 23, 2010, you may have a grandfathered plan, in which case you must carefully read the fine print, as some of these provisions will not apply. For instance, grandfathered plans don’t necessarily need to cover preventive care for free (more on this below).
6. How do I get started?
My main takeaway from scanning for info: this will not be a one-size-fits-all scenario for any of us.
For those planning to enroll state health care exchange, this is what the application will look like.
You can also find your state’s exchange.
For those who already have job-based insurance, you can either keep your insurance, or might be able to switch to a marketplace plan.
For those who've been enrolled in a plan since March 23, 2010, you will need to check with your employer or insurer to find out whether your plan is "grandfathered." Health plans must disclose their grandfathered status in their plan materials and their summary of benefits and coverage. If you see major changes to your grandfathered job-based health plan's coverage or costs, contact the Employee Benefits Security Administration at askebsa.DOL.gov.
For part-time employees, there are options for coverage.
For small business owners, you can get general info, find out if you have to cover my employee, and get help from an agent or broker. You can talk to someone for more info at (800) 318-2596.
For night owls, you can tweet/live chat with someone about your question from the comfort of your home anytime (available 24/7).
Note: I test-drove healthcare.gov’s 800 number and chat options. My experience with chat was more helpful than on the phone, mostly because the questions I had ended up being specific to California. Their site, chat, and phone options are a good starting point, but for more complex questions, you will likely need to check in with your state's exchange.
Photo and infographic courtesy of the The California Endowment